Barclays analysts report that core grocery shoppers are increasingly favoring Walmart and dollar stores as they enter 2026, driven by persistent consumer pressure to find better value. The analysis tracks transaction wallet share across retail segments, revealing that Walmart has accelerated its gains in the last three months compared to Q3 2025.

While inflation remains limited, weak consumable trends have made unit volumes and traffic the industry's most critical performance indicators. Dollar stores saw accelerated transaction share gains in Q4 2025 as consumers "trade down" amid economic uncertainty. Hard discounters like Aldi maintained steady gains, consistent with long-term value-seeking behavior.

Meanwhile, Target continues to struggle with core traffic issues, with its grocery wallet share declining in line with previous trends. The analysis suggests Target needs to show improvement in H1 2026 as it navigates ongoing merchandising and labor changes. Large public grocers are also losing wallet share at a rate similar to the previous quarter, indicating a broad-based shift away from traditional supermarket formats toward more aggressive discounters.